Raising the Overtime Threshold Would Directly Benefit 13.5 Million Workers: Here is a Breakdown of Who They Are

These tables give a detailed breakdown of EPI’s estimate that 13.5 million salaried workers would directly benefit from the Department of Labor’s proposal to raise the salary threshold below which salaried workers are automatically eligible for overtime pay. According to our assessment, most of these 13.5 million workers will be newly eligible for overtime protections: they are currently ineligible for overtime pay because they are classified, or wrongly classified, as having job duties that preclude receiving overtime. The rest would have their rights strengthened (they are currently at risk of being classified or misclassified as ineligible for overtime). There is inherent uncertainty in these estimates because no data are available documenting who is currently eligible for or receiving overtime.

In other words, workers making at or above the current threshold can be excluded from overtime protection if their jobs are determined to be executive, administrative, or professional (EAP) jobs. The proposal would raise the threshold from $455 per week to $933 per week (in 2014 dollars). There are 13.5 million salaried workers making at least $455 but less than $933 per week, and under the Fair Labor Standards Act (FLSA), those workers can be excluded from automatic overtime protection if they are classified, or incorrectly classified, as EAP employees.

FLSA overtime rules were established to make sure that all but higher-level workers with control over their time or tasks aren’t working overtime but not getting paid for it. Unfortunately, rule changes in 2004 regarding the “duties tests” used to determine who does relatively high-level work made it a lot easier to deprive many lower-level workers of overtime protection by tweaking their job descriptions. Employer willingness to push the limits of the law have resulted in widespread noncompliance and misclassification. Raising the threshold would return overtime protection to the employees who need it by preempting these malleable duties tests for the workers under the new threshold.

As the tables show, raising the overtime salary threshold would directly benefit a broad range of workers, including:

6.9 million women, or 51.3 percent of all directly benefiting workers

4.6 million parents and 9.2 million children (under age 18)

1.6 million blacks (who make up 8.8 percent of the salaried workforce but 11.5 percent of directly benefiting workers), and 2.1 million Hispanics (who make up 11.6 percent of the salaried workforce but 15.5 percent of directly benefiting workers)

3.8 million workers age 25 to 34 (who make up 22.8 percent of the salaried workforce but 28.2 percent of directly benefiting workers)

3.4 million workers with a high school degree but not more education (who make up 16.1 percent of the salaried workforce but 25.6 percent of directly benefiting workers)

Raising the threshold would affect workers in all states, with the biggest effects—in terms of states with the greatest share of salaried workers in that state who would directly benefit from raising the threshold­—in Arkansas (35.5 percent), Hawaii (33.9 percent), North Carolina (32.1 percent), Oklahoma (31.9 percent), Louisiana (31.7 percent), Florida (31.4 percent), Nevada (31.0 percent), Tennessee (30.2 percent), and Alabama (30.0 percent).

Of the major industries, the new threshold would have the biggest impacts—in terms of the greatest share of salaried workers in the industry who would directly benefit from an increase in the overtime threshold­—in leisure and hospitality (38.7 percent); other services (36.4 percent); construction (35.1 percent); agriculture, forestry, fishing, and hunting (34.9 percent); and public administration (34.7 percent).

Occupations with the greatest share of salaried workers in the occupation who would directly benefit would be office and administrative support occupations (48.9 percent); transportation and material moving occupations (44.3 percent); construction and extraction occupations (43.3 percent); installation, maintenance, and repair occupations (41.4 percent); and production occupations (38.6 percent).

Note: The sample reflects salaried (nonhourly) workers who are subject to the Fair Labor Standards Act (FLSA). This excludes certain groups of workers such as the self-employed, most federal workers, religious workers, many agricultural workers, and many transportation workers.

Source: Economic Policy Institute analysis of Current Population Survey Outgoing Rotation Group microdata

Salaried workers directly benefiting from the proposed increase in the overtime salary threshold, by demographic, 2014

Group

Total salaried workers*

Directly benefiting salaried workers**

Share of group’s salaried workers that are directly benefiting

Group’s share of directly benefiting workers

Group’s share of total salaried workforce

(A)

(B)

(C)=(B/A)

(D)=(Bx/B1)

(E)=(Ax/A1)

All (1)

52,522,000

13,463,000

25.6%

100.0%

100.0%

Gender

Male

27,590,000

6,556,000

23.8%

48.7%

52.5%

Female

24,933,000

6,908,000

27.7%

51.3%

47.5%

Race/ethnicity***

White

37,096,000

8,740,000

23.6%

64.9%

70.6%

Black

4,622,000

1,555,000

33.6%

11.5%

8.8%

Hispanic

6,077,000

2,091,000

34.4%

15.5%

11.6%

Other

4,727,000

1,077,000

22.8%

8.0%

9.0%

Age group

16–24

2,746,000

941,000

34.3%

7.0%

5.2%

25–34

11,961,000

3,803,000

31.8%

28.2%

22.8%

35–44

13,026,000

3,062,000

23.5%

22.7%

24.8%

45–54

12,884,000

3,053,000

23.7%

22.7%

24.5%

55–64

9,377,000

2,132,000

22.7%

15.8%

17.9%

65+

2,528,000

473,000

18.7%

3.5%

4.8%

Educational attainment

Less than high school

1,863,000

720,000

38.6%

5.3%

3.5%

High school

8,469,000

3,440,000

40.6%

25.6%

16.1%

Some college

11,558,000

4,178,000

36.1%

31.0%

22.0%

College degree

18,156,000

3,932,000

21.7%

29.2%

34.6%

Advanced degree

12,476,000

1,194,000

9.6%

8.9%

23.8%

* The sample reflects salaried (nonhourly) workers who are subject to the Fair Labor Standards Act (FLSA). This excludes certain groups of workers such as the self-employed, most federal workers, religious workers, many agricultural workers, and many transportation workers.

**Directly benefiting salaried workers are those who would newly be guaranteed overtime protection by virtue of their salary alone under the proposed higher overtime threshold, i.e., they make at least $455 a week (the current threshold) but less than $933 a week (the new threshold in 2014 dollars). This includes workers who are newly eligible (they are currently excluded from automatic overtime protection because they are classified, in some cases incorrectly, as executive, administrative, and professional or "EAP" employees); and workers whose rights are strengthened (they are currently at risk of being classified as EAP employees).
*** Race/ethnicity categories are mutually exclusive (i.e., white non-Hispanic, black non-Hispanic, and Hispanic any race).

Note: Subtotals may not add up to totals due to rounding.

Source: EPI analysis of the U.S. Department of Labor's Notice of Proposed Rulemaking (2015) and Current Population Survey Merged Outgoing Rotation Group microdata (CPS MORG)

Number of mothers, fathers, and children newly covered by updated overtime salary threshold, by demographic, 2014

Covered under $455

Covered under $933

Newly covered under $933

Mothers

1,017,000

3,419,000

2,402,000

Fathers

666,000

2,885,000

2,219,000

Children (under 18)

3,600,000

12,780,000

9,179,000

Note: The sample reflects salaried (nonhourly) workers who are subject to the Fair Labor Standards Act (FLSA). This excludes certain groups of workers such as the self-employed, most federal workers, religious workers, many agricultural workers, and many transportation workers.

Source: EPI analysis of the U.S. Department of Labor's Notice of Proposed Rulemaking (2015) and Current Population Survey Merged Outgoing Rotation Group microdata (CPS MORG)

Salaried workers directly benefiting from the proposed increase in the overtime salary threshold, by state, 2014

State

Total salaried workers*

Directly benefiting salaried workers**

Share of state’s salaried workers that are directly benefiting

State’s share of directly benefiting workers

State’s share of total salaried workforce

(A)

(B)

(C)=(B/A)

(D)=(Bx/B1)

(E)=(Ax/A1)

United States(1)

52,522,000

13,463,000

25.6%

100.0%

100.0%

Alabama

688,000

206,000

30.0%

1.5%

1.3%

Alaska

94,000

18,000

19.6%

0.1%

0.2%

Arizona

985,000

230,000

23.4%

1.7%

1.9%

Arkansas

365,000

130,000

35.5%

1.0%

0.7%

California

5,947,000

1,230,000

20.7%

9.1%

11.3%

Colorado

1,073,000

257,000

23.9%

1.9%

2.0%

Connecticut

678,000

121,000

17.8%

0.9%

1.3%

Delaware

159,000

45,000

28.2%

0.3%

0.3%

District of Columbia

166,000

33,000

20.0%

0.2%

0.3%

Florida

3,618,000

1,137,000

31.4%

8.4%

6.9%

Georgia

1,699,000

469,000

27.6%

3.5%

3.2%

Hawaii

216,000

73,000

33.9%

0.5%

0.4%

Idaho

214,000

63,000

29.5%

0.5%

0.4%

Illinois

2,319,000

589,000

25.4%

4.4%

4.4%

Indiana

936,000

267,000

28.5%

2.0%

1.8%

Iowa

447,000

110,000

24.6%

0.8%

0.9%

Kansas

470,000

112,000

23.8%

0.8%

0.9%

Kentucky

564,000

164,000

29.0%

1.2%

1.1%

Louisiana

710,000

225,000

31.7%

1.7%

1.4%

Maine

182,000

45,000

24.7%

0.3%

0.3%

Maryland

1,141,000

249,000

21.9%

1.9%

2.2%

Massachusetts

1,398,000

263,000

18.8%

2.0%

2.7%

Michigan

1,376,000

345,000

25.0%

2.6%

2.6%

Minnesota

1,010,000

230,000

22.8%

1.7%

1.9%

Mississippi

363,000

99,000

27.3%

0.7%

0.7%

Missouri

954,000

263,000

27.6%

2.0%

1.8%

Montana

103,000

26,000

25.3%

0.2%

0.2%

Nebraska

321,000

88,000

27.3%

0.7%

0.6%

Nevada

396,000

123,000

31.0%

0.9%

0.8%

New Hampshire

242,000

54,000

22.2%

0.4%

0.5%

New Jersey

1,898,000

433,000

22.8%

3.2%

3.6%

New Mexico

247,000

61,000

24.6%

0.5%

0.5%

New York

4,132,000

1,067,000

25.8%

7.9%

7.9%

North Carolina

1,641,000

528,000

32.1%

3.9%

3.1%

North Dakota

118,000

34,000

28.8%

0.3%

0.2%

Ohio

1,604,000

412,000

25.7%

3.1%

3.1%

Oklahoma

526,000

168,000

31.9%

1.2%

1.0%

Oregon

558,000

131,000

23.5%

1.0%

1.1%

Pennsylvania

2,004,000

494,000

24.6%

3.7%

3.8%

Rhode Island

175,000

36,000

20.5%

0.3%

0.3%

South Carolina

735,000

211,000

28.7%

1.6%

1.4%

South Dakota

108,000

30,000

27.4%

0.2%

0.2%

Tennessee

841,000

254,000

30.2%

1.9%

1.6%

Texas

4,657,000

1,324,000

28.4%

9.8%

8.9%

Utah

499,000

130,000

26.0%

1.0%

1.0%

Vermont

104,000

25,000

24.1%

0.2%

0.2%

Virginia

1,554,000

357,000

23.0%

2.7%

3.0%

Washington

1,127,000

222,000

19.7%

1.6%

2.1%

West Virginia

230,000

68,000

29.7%

0.5%

0.4%

Wisconsin

850,000

198,000

23.3%

1.5%

1.6%

Wyoming

80,000

20,000

24.4%

0.1%

0.2%

* The sample reflects salaried (nonhourly) workers who are subject to the Fair Labor Standards Act (FLSA). This excludes certain groups of workers such as the self-employed, most federal workers, religious workers, many agricultural workers, and many transportation workers.

** Directly benefiting salaried workers are those who would newly be guaranteed overtime protection by virtue of their salary alone under the proposed higher overtime threshold, i.e., they make at least $455 a week (the current threshold) but less than $933 a week (the new threshold in 2014 dollars). This includes workers who are newly eligible (they are currently excluded from automatic overtime protection because they are classified, in some cases incorrectly, as executive, administrative, and professional or "EAP" employees); and workers whose rights are strengthened (they are currently at risk of being classified as EAP employees).

Note: Subtotals may not add up to total due to rounding.

Source: EPI analysis of the U.S. Department of Labor's Notice of Proposed Rulemaking (2015) and Current Population Survey Merged Outgoing Rotation Group microdata (CPS MORG)

Salaried workers directly benefiting from the proposed increase in the overtime salary threshold, by major industry, 2014

Total salaried workers*

Directly benefiting salaried workers**

Share of industry’s salaried workers that are directly benefiting

Industry’s share of directly benefiting workers

Industry’s share of total salaried workforce

(A)

(B)

(C)=(B/A)

(D)=(Bx/B1)

(E)=(Ax/A1)

All (1)

52,522,000

13,463,000

25.6%

100.0%

100.0%

Agriculture, forestry, fishing, and hunting

335,000

117,000

34.9%

0.9%

0.6%

Mining

438,000

99,000

22.6%

0.7%

0.8%

Construction

2,272,000

797,000

35.1%

5.9%

4.3%

Manufacturing

5,240,000

1,230,000

23.5%

9.1%

10.0%

Wholesale and retail trade

5,349,000

1,808,000

33.8%

13.4%

10.2%

Transportation and utilities

2,006,000

637,000

31.8%

4.7%

3.8%

Information

1,557,000

366,000

23.5%

2.7%

3.0%

Financial activities

5,225,000

1,451,000

27.8%

10.8%

9.9%

Professional and business services

7,210,000

1,716,000

23.8%

12.7%

13.7%

Educational and health services

15,828,000

2,655,000

16.8%

19.7%

30.1%

Leisure and hospitality

2,496,000

966,000

38.7%

7.2%

4.8%

Other services

2,138,000

778,000

36.4%

5.8%

4.1%

Public administration

2,427,000

843,000

34.7%

6.3%

4.6%

* The sample reflects salaried (nonhourly) workers who are subject to the Fair Labor Standards Act (FLSA). This excludes certaingroups of workers such as the self-employed, most federal workers, religious workers, many agricultural workers, and many transportation workers.

** Directly benefiting salaried workers are those who would newly be guaranteed overtime protection by virtue of their salary alone under the proposed higher overtime threshold, i.e., they make at least $455 a week (the current threshold) but less than $933 a week (the new threshold in 2014 dollars). This includes workers who are newly eligible (they are currently excluded from automatic overtime protection because they are classified, in some cases incorrectly, as executive, administrative, and professional or "EAP" employees); and workers whose rights are strengthened (they are currently at risk of being classified as EAP employees).

Note: Subtotals may not add up to total due to rounding.

Source: EPI analysis of the U.S. Department of Labor's Notice of Proposed Rulemaking (2015) and Current Population Survey Merged Outgoing Rotation Group microdata (CPS MORG)

Salaried workers directly benefiting from the proposed increase in the overtime salary threshold, by major occupation, 2014

Total salaried workers*

Directly benefiting salaried workers**

Share of industry’s salaried workers that are directly benefiting

Industry’s share of directly benefiting workers

Industry’s share of total salaried workforce

(A)

(B)

(C)=(B/A)

(D)=(Bx/B1)

(E)=(Ax/A1)

All (1)

52,522,000

13,463,000

25.6%

100.0%

100.0%

Management, business, and financial occupations

13,555,000

2,775,000

20.5%

20.6%

25.8%

Professional and related occupations

19,160,000

2,702,000

14.1%

20.1%

36.5%

Services occupations

4,325,000

1,639,000

37.9%

12.2%

8.2%

Sales and related occupations

5,207,000

1,709,000

32.8%

12.7%

9.9%

Office and administrative support occupations

4,968,000

2,427,000

48.9%

18.0%

9.5%

Farming, fishing, and forestry occupations

245,000

84,000

34.2%

0.6%

0.5%

Construction and extraction occupations

1,373,000

594,000

43.3%

4.4%

2.6%

Installation, maintenance, and repair occupations

1,086,000

449,000

41.4%

3.3%

2.1%

Production occupations

1,198,000

462,000

38.6%

3.4%

2.3%

Transportation and material moving occupations

1,405,000

622,000

44.3%

4.6%

2.7%

* The sample reflects salaried (nonhourly) workers who are subject to the Fair Labor Standards Act (FLSA). This excludes certain groups of workers such as the self-employed, most federal workers, religious workers, many agricultural workers, and many transportation workers.

** Directly benefiting salaried workers are those who would newly be guaranteed overtime protection by virtue of their salary alone under the proposed higher overtime threshold, i.e., they make at least $455 a week (the current threshold) but less than $933 a week (the new threshold in 2014 dollars). This includes workers who are newly eligible (they are currently excluded from automatic overtime protection because they are classified, in some cases incorrectly, as executive, administrative, and professional or "EAP" employees); and workers whose rights are strengthened (they are currently at risk of being classified as EAP employees).

Note: Subtotals may not add up to total due to rounding.

Source: EPI analysis of the U.S. Department of Labor's Notice of Proposed Rulemaking (2015) and Current Population Survey Merged Outgoing Rotation Group microdata (CPS MORG)

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EPI is an independent, nonprofit think tank that researches the impact of economic trends and policies on working people in the United States. EPI’s research helps policymakers, opinion leaders, advocates, journalists, and the public understand the bread-and-butter issues affecting ordinary Americans.